The trade was excited by a slow kill over the summer, which lasted into September, and an emotional interpretation of the trips to Asia at the beginning of September. So both main market segments, the cows driven by the international market and the bulls by the domestic one, were quickly heated up and the results are fairly well known. However, so far, market realities have not supported any of the enthusiastic views. We have not seen a ‘buying frenzy’ since then nor have other international markets seen a price explosion to propel European prices to any expected levels. At the end of the day, speculation and market share strategies remain the only explanations for levels reached at the abattoirs so far and, understandably, butchers see no reason why this should come to an end yet. Niche situations like, for example, a strong performance of specific vegetable leathers and the excellent situation in the luxury market, may explain temporary and isolated movements, but these are not sufficient to support the market as a whole.

Sales during the week were rather spotty again. Input and output are still adequately balanced and selling prices are still reasonably stable. However, adequate selling levels related to the prices paid at the abattoir doors can still not be obtained. The international cow market has been capped in prices since the beginning of September and is still thriving from the forward positions in the market. The market for bulls has been driven by isolated players in the automotive field who still do not believe they can run their businesses without a fresh and specific raw material. The strong demand for hides suitable for specific vegetable leathers has boosted French hide prices and the effects of this have spilled over into many other regions of Europe which are not really involved in the situation.

The kill: The seasonal increase continues. It is no longer a ‘wall of cattle’ anymore, but numbers are increasing and weights are also slowly rising. Apart from weights there is little change in the slaughter mix and we are still waiting for larger numbers of ox and heifers to arrive. Although temperatures are still high for this time of year, days are getting shorter and nights are getting colder; the kill will increase further.

What do we expect: Over the next two to three weeks we will be at a crossroad. Either tanners will have to replenish stocks, whether they are happy with prices or not, or they can prepare for battle and increase their resistance against the present market. Sellers will remain fairly unimpressed until they can see whether they will be able to dispose of their increasing raw material intake for the rest of the year. The fair in Bologna next week will, at least, create more opinions or, at best, deliver hard facts for market evaluation. Until then there are still no changes.

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